More definitions of economics

I just asked this new Wolfram Alpha search engine “what is economics”.  It told me:

Economics:  The branch of social science that deals with the production and distribution and consumption of goods and services and their management

This differs from the Robbins definition of economic science:

Economics is a science which studies human behavior as a relationship between ends and scarce means which have alternative uses

And it differs from the broadest possible definition that we discussed earlier:

The study of how humans/societies allocate scarce resources.

Given no mention of “human behaviour” or incentives this definition is wider than the Robbins definition.

Is the Wolfram definition any different to our broadest definition?  Well if certain elements are defined correctly I would say they are equivalent.  As a result, it doesn’t tell us what economists do, or what the dominant school of economic thought is.  Wolfram is simply giving us a definition of the broadest scope of what “economics” can be (and has been) seen as – as long as we define the “outputs” (goods and services) as widely as humanly possible.

So, given that the Robbins definition is the one that more fully captures the essence of what economists currently do (with our obsession with methodological individualism) I tried typing “what is economic science” in.  But it told me:

Wolfram Alpha isn’t sure what to do with your input

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  • Matt, you said earlier that “Economics aims to understand one thing, and one thing only. Scarcity.” I think this is wrong, and leads to your “broadest possible definition” being so broad as to be almost useless — and (as Robbins does) to focussing on the wrong thing.

    A good definition should clearly identify the units subsumed, while distinguishing it from other units. To be too broad is almost to have no real definition. It should also, when defining a field of study, define what that field actually seeks to do, rather than what it tries to avoid.

    So I’d suggest your definition be more targeted than your “broad definition.”

    In any case, I don’t think it’s true that economics studies scarcity — unless of course you confine yourself to studying socialist economics (which the study of “allocations” suggests you’re promoting). ;^)

    I’d suggest, in fact, that economics studies the production of wealth — specifically, the production of material goods and services under a system in which individuals tend to specialise in what they produce, and rely on “indirect exchange” to exchange them.

    Which is to say, as George Reisman does, that “economics is the science that studies the production of wealth under a system of division of labour.”

    The late Larry Sechrest calls this “much narrower” definition “very promising” as a way by which to firmly delineate the field. [See here and here for example.]

    Says Sechrest (quoting Reisman), studying “choices,” “alternatives,” etc “‘confuses an aspect of the science with its totality’….they ‘seek esoteric extensions of the subject that have nothing whatever to do with its actual nature.’ For Reisman, choices are certainly important, but only insofar as they are involved in the process of producing more wealth. . .”

  • @Peter Cresswell

    Hi Peter,

    I agree that the broad definition is so vague that it has little use. However, the only purpose of a definition that vague is to outline the domain within which economics has found itself through time. When I do economics, I definitely focus on a subset of that – as otherwise I wouldn’t be able to do anything 🙂

    However, I am not sure I agree that Robbins definition is too weak – as I do see economics as the study of how scarce means and the end which we value.

    A focus solely on production does not encapsulate the entire set of ends that exist in a society – and as a result I do not see any definition that is solely focused on individual products as fully descriptive of the discipline. Why? Because it will not capture the full set of trade-offs associated with any shift in the economy, and these trade-offs are the very core of economic analysis.

    Furthermore, I don’t take “allocation” to necessarily be a term that must be associated with socialism. There is always an allocation of resources – even when there is no “central body” setting it. I 100% agree with you that the idea of allocation can be abused (namely by politicians) in order to make it sound like it is the government putting things places – when it is actually the result of voluntary trade between individuals. So to be clear there is no-one allocating resources, but by definition there IS an allocation of resources at any point in time.

  • Matt, you said, “A focus solely on production does not encapsulate the entire set of ends that exist in a society.

    True. But the field of economics is not “the entire set of ends that exist in a society.” That is rightly the study of ethics. Economics is not a primary discipline.

    If definition is to be by essentials then, this is far too broad – and if definition is to be by essentials, then it must deal with how “resources” acquire “goods character” — which is to say, it must deal with the field of production in a system of division of labour.

    And you said, “However, I am not sure I agree that Robbins definition is too weak . . .

    My criticism of Robbins’s definition is not so much that it is weak, but that it is essentially a ‘definition by negatives’ — arguing from the state we supposedly seek to change, i.e., scarcity (which in any case is factually untrue) instead of seeking the uniquely defining characteristics of economics itself.

    Furthermore, I don’t take “allocation” to necessarily be a term that must be associated with socialism . . .

    The point is that to start your science by defining it as the “allocation of resources,” or “management” of goods and services is essentially starting your science in mid-stream. You observe that men are producing, and then set about studying how you might “manage” or “allocate” their production.

    There are a number of ethical assumptions automatically built into such a definition — among them that people’s production is there to be reallocated — and a number of causal errors, chief amongst them that it obscures (or seeks to deny) where these “resources” and “goods” come from (that is, how these resources came to be recognised as resources, rather than just piles of dirt, and how by what human effort they then came to acquire goods character).

    This is, as Ayn Rand once pointed out, the chief problem particularly with so called “macroeconomics”; that it is in effect . . .

    “a science starting in midstream: it observed that men were producing and trading, it took for granted that they had always done so and always would—it accepted this fact as the given, requiring no further consideration—and it addressed itself to the problem of how to devise the best way for the “community” to dispose of human effort. . .

  • @Peter Cresswell

    Hi again Peter,

    Sorry my replies are so slow – the period from April to August is always incredibly busy for me, so the attention I can pay to the blog falls considerably.

    “True. But the field of economics is not “the entire set of ends that exist in a society.” That is rightly the study of ethics. Economics is not a primary discipline.”

    Interesting. I think economics sees itself as a positivist version of the social sciences. Economists do see them selves as providing a fundamental framework that all social sciences should use.

    Hence, we also believe that we can “abstract” from the study of ethics by generalising our framework as much as possible. This is the distinction between the economic scientist and the policy economist – the economic scientist wants to build a framework, while the policy economist adds value judgments to the framework (namely ethical assumptions) in order to reach a conclusion.

    The economic scientist can’t conclude or analyse anything – so the study of scarcity that Robbins says economic scientist are involved in is merely the creation of a general, tractable, framework.

    A definition of what a policy, or normative, economist does would probably be a good thing to write on as well – I will have to think about that 🙂

    “You observe that men are producing, and then set about studying how you might “manage” or “allocate” their production”

    I would say that an economic scientist is only interested in how the allocation of resources that is there comes about – and how the allocation changes as things change. It is about studying how individuals who trade voluntarily lead to a given state of the world. There is no intent to change the allocation – the only intent is to understand how the allocation appears.

  • But “the allocation” doesn’t just appear. “Resources” don’t just appear. Goods don’t just appear.

    All these things are created. Produced.

    Men don’t just compete for available resources — they create the resources.

    Which gets me back to my original point: you can’t ignore production.

    Without it you don’t have a science.

  • selorm

    I need more definitions of Economics.